My wife and I own a rental property. After all operating costs, including property taxes, income taxes, insurance etc, we are making roughly $450/month. This money is then invested in an index fund. The rental property is worth $500,000, and we owe $250,000 on the mortgage over 20 years, currently at 4.02% fixed. The mortgage balance on our primary residence is $200,000 over 16 years currently at 4.35% fixed. My question is: Does it make more financial sense to keep the rental property, or to sell the rental property and pay off the mortgage on our primary residence? Money that would have been spent on the mortgage would be invested in an index fund. Thanks in advance for all your input!

Tough to give the full context but will try to give as much as possible: \- Currently golden cuffed with a 2.75% interest rate \- Owe $600K \- Model match just sold in 1 week at $1.6M \- we will outgrow this home in 3 years as my youngest gets older and want their own rooms \- I’m over corporate - hate it - but as a single income household we’re dependent upon my large paycheck; on eggshells constantly to ensure I’m not fired or laid off \- oddly enough despite the cost of ownership, this would basically breakeven as a rental given local rental rates I’m of the mindset to capitalize and rent for 2 years or so while we figure things out. It gives me a career safety net with years of runway. And note that I wouldn’t quit but I’d have the option to, plus could take a more fun / lower paying job or transition careers/etc. I’d sign a 2 year lease in a nice home to stabilize the family. We’d use those 2 years to determine what I do / what my wife does (if anything) but with nearly $1M cash safety net vs maintaining debt and a breakeven rental with a similar monthly nut. If not, my wife would likely need to return to work to help put us ahead financially. Also yes we have a HELOC but using it just makes the monthly nut larger and exacerbates my situation. Lastly the 2.75% interest rate is not lost on me. I understand it may never happen again but \~$1M windfalls in a crossroads situation is pretty cool too and frankly I’m tired of being golden cuffed to both my work and my home. Tl;dr career crossroads / wife may need to return to work but cashing in on home equity on a house we’ll outgrow anyway transforms our lives. Curious how others feel and know based on our friend group we’re not alone in this predicament.